News and Research

Solganick & Co. Issues Software M&A Update for Q2 2017

July 11, 2017 – Solganick & Co. has issued its latest Software M&A Update for Q2 2017. You can download the complete report here: Solganick – Software  M&A Update for Q2 2017

Quick Answer

Solganick & Co.'s Q2 2017 Software M&A Update reported that global M&A activity reached USD $793.9 billion, marking a 6.36% increase from Q1 2017. Software transactions dominated technology deal value and volumes in the first half of 2017, driven by limited organic growth options and the need for business model transformation across industries. The median revenue multiple for software M&A shifted slightly from 2.5x in 2nd Half 2016 to 2.3x in 1st Half 2017, while the median EBITDA multiple held steady at 13.3x. The middle market experienced its most productive first half in a decade during this period, recording 5,620 deals.

The following summarizes the highlights of the report:

  • Global M&A activity in Q2 2017 was USD $793.9 billion – deal value increased by 6.36% compared to Q1 2017.
  • The first six months of 2017 proved the middle market’s most productive first half in 10 years, inking 5,620 deals, according to Thompson Reuters.
  • Global M&A activity has been motivated by limited organic growth options and the need to address the business model transformation that is occurring across industries. Example, Amazon’s acquisition of Whole Foods Market.
  • Software dominated overall technology deal value and volumes during 1st half 2017. Transaction volume in 1st Half 2017 increased 12 percent versus 2nd Half 2016, from 985 to 1,099.
  • Infrastructure Software contributes to the largest rise in volume in 1st Half 2017 versus 2nd Half 2016 with a 21 percent gain, from 132 to 160 transactions.
  • The median revenue multiple moved slightly from 2.5x in 2nd Half 2016 to 2.3x in 1st Half 2017.
  • The median EBITDA multiple remained constant during this time-frame at 13.3x.
  • Transactions in 1st Half 2017 with enterprise values above $160 million received a median revenue multiple of 3.9x, whereas those in the $10 – $20 million range had a median revenue multiple of 2.2x.

You can download the complete report here: Solganick – Software  M&A Update for Q2 2017

Solganick & Co. is an independent investment banking and M&A advisory firm exclusively covering the software, tech-enabled services and digital media sectors globally. For more information, please contact us.

 

Frequently Asked Questions

1 What were the main trends in software M&A during Q2 2017?

Global M&A activity in Q2 2017 reached USD $793.9 billion, with software dominating technology deal value and volumes. Transaction volume in the first half of 2017 increased by 12% compared to the second half of 2016.

2 How did software valuation multiples change in Q2 2017?

The median revenue multiple for software M&A moved slightly from 2.5x in 2nd Half 2016 to 2.3x in 1st Half 2017. The median EBITDA multiple remained constant at 13.3x during this period.

3 What was the M&A activity like for the middle market in early 2017?

The first six months of 2017 proved to be the middle market’s most productive first half in 10 years, with 5,620 deals recorded. This activity was motivated by limited organic growth options and business model transformation.

4 Where can I download the full Q2 2017 Software M&A Update report?

The complete report, "Solganick – Software M&A Update for Q2 2017," is available for download directly from this webpage. There are two links provided within the article to access it.